Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

Delivering change How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

About Centre for Cities Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities. We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies. We do this through impartial research and knowledge exchange. For more information, please visit www.centreforcities.org/about About the authors Simon Jeffrey is Policy Officer at Centre for Cities: s.jeffrey@centreforcities.org | 020 7803 4325 Lahari Ramuni is a Researcher at Centre for Cities: l.ramuni@centreforcities.org | 020 7803 4300 Acknowledgements The authors would like to thank Telefónica UK for the support which made this research possible.

The authors would also like to thankBe the Business,British Chambers of Commerce, British Property Federation, City of London, City of London Corporation, City of York City Council, CityFibre, CTIL, Department for Digital, Culture, Media and Sports, Future Cities Catapult, Good Things Foundation, Greater London Authority, LB Hammersmith & Fulham, London First, Milton Keynes Council, Mobile UK, National Infrastructure Commission, Nesta, Nitrous, Ofcom, PUBLIC, the RSA, Salford City Council, Tech Nation, TechUK, Transport for London, thinkbroadband and West Midlands Combined Authority.

Photo attribution: “Washington Heights [the Bronx, New York]” by Albyn Davis, Flickr Creative Commons. “Media City Salford” by Steve Wood, Flickr Creative Commons. All mistakes are the authors’ own. Supported by

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

About Telefónica UK O2 is the commercial brand of Telefónica UK Limited and is the mobile network operator with the highest customersatisfaction in the UK, according toThe Institute of Customer Service. O2 was also awarded Best Network Coverage in 2018 by uSwitch. With over 32 million connections to the network, O2 runs 2G, 3G and 4G services across the UK, as well as operating its nationwide O2 Wifi service. O2 has over 450 retail stores and sponsors The O2, O2 Academy venues and England Rugby. Read more about O2 at o2.co.uk/news.

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

July 2018 • Delivering change: how cities can make the most of digital connections 1 Executive summary Digital connectivity has played a role in changing the economic, social and physical fabric of UK cities. Full fibre connections to every home and 5G coverage will continue this change in some ways we can predict, and others we cannot. Cities need to prepare their built environment and human capital to take advantage of this. Cities in the UK and around the world provide examples of how they are doing both.

Speed up investment in digital infrastructure. Investmentin the digital ‘hardware’ of fibre and mobile networks in cities continues to grow as data demands grow at nearly 50 per cent a year. This densification of fibre and mobile networks will accelerate towards the introduction of commercial 5G from 2020. Cities need to prepare for this now so that they do not fall behind their domestic and international counterparts and so they can keep up with public expectations. This must be done while ensuring that life for businesses and citizens is not unduly disrupted and any potential economic and financial gains for cities are maximised.

Cities can take action today to accelerate improvements in digital infrastructure by reducing unnecessary barriers to investment. York and the City of London have shown that cities can speed up investment by: • Demonstrating the ambition to be a digitally connected city – action is at least as important as strategies. Embedding the use of technology to improve the quality of council activities – from paying council tax to remotely monitoring potholes — is the best signal to investors and the public of the benefits of investment. • Creating an attractive market – working at the city scale to create common rules, rather than as individual local authorities, makes rollout simpler by avoiding regulation changes along and between neighbouring streets.

• Making digital access work in new ways — dense fibre and mobile networks connecting every building and potentially lamppost in a city will likely require new arrangements to enable access to many times more sites than current digital networks require. New commercial models and the capacity in local authorities to enable or deliver new installations, maintenance and upgrades should be considered.

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

July 2018 • Delivering change: how cities can make the most of digital connections 2 The Government can also play a stronger role in supporting cities to deliver its ambition for world-class digital connectivity. To do this it should: • Include a requirement for the provision of high-quality digital infrastructure – mobile and fixed — in all new developments in the forthcoming National Planning Policy Framework (NPPF). This will reduce unnecessary disruption, costs and delays for residents or firms moving in. • Review the Electronic Communications Code (ECC) after 12 months and take action if its provisions remain a barrier to new investment in digital infrastructure. The ECC has significantly reduced rents offered to landowners for hosting new mobile masts or cells. Landowners are now much less willing to engage with operators looking to install new masts or cells to provide the capacity that consumers demand in cities. Network operators and the British Property Federation have both called for action.

Improvedigitalskillsprovisionandinnovation.Providinginfrastructure is not enough. Evidence suggests that the UK is not making the most of what is already available. Superfast broadband is available to 94 per cent of homes in cities, but take-up is 43 per cent. And in the delivery of public services, take-up of digital innovation varies significantly across cities. Without action to increase the ability and desire of individuals, businesses and local authorities to capitalise on the potential of this public and private investment, then digital and economic divides are likely to widen further. • The national government must devolve the adult education budget to metro mayors, as was promised, to allow them to support digital skills provision.

• Cities and businesses need to take a leading role in Local Digital Skills Partnerships (LDSP), helping to coordinate digital skills activities across many local stakeholders and ensure that evaluation and evidence are central to all interventions • Cities should embrace the opportunity of existing digital technology to improve public services by adopting best practice, upskilling the public sector workforce and improving procurement.

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

July 2018 • Delivering change: how cities can make the most of digital connections 3 Introduction Significant new private investment in fibre and mobile connectivity in cities is planned over the next five years, backed by the national government’s ambition to create a ‘world class’ digital infrastructure. While the UK performs well on current digital connectivity measures compared to other countries, around the world national governments, cities and network operators are pushing ahead to build better digital connectivity. Leadership in 5G is a strategic ambition of the EU, US, Japan and China.1 To achieve the Government’s ambition it is therefore important for UK cities to get to grips with this rollout to avoid falling behind international rivals and deliver improvements in connectivity that citizens and workers will expect. The rollout of full fibre will be an accelerated continuation of what has gone before. On mobile, significant upgrades of networks using existing technologies mean more masts and cells to provide greater 4G mobile capacity to keep up with mobile data demands which are growing by around 50 per cent a year.2 Cities have long worked with broadband, fibre and mobile network providers to balance investment, access and public and private benefit, and this partnership will deepen as these networks densify. A ‘world class’ digital infrastructure in cities will require a fibre network connecting every building as well as significantly more 4G — and soon 5G — cells. This could see lampposts connected to fibre networks in order to host microcells. London alone is expected to require 500,000 cells in order to offer 5G everywhere.3 This report offers advice and support to national government and cities on how to manage this significant uptick in investment in physical infrastructure in a way that is most efficient, effective and least disruptive for citizens and businesses. But there are already digital divides in many cities. Citizens and businesses are yet to fully grasp the economic and social benefits of existing digital infrastructure. Realising its full potential requires awareness, skills and confidence.

Cities have already had significant experience working with mobile and fibre network operators to deal with the growth of fixed connection and greater 1  BEREC (2018) ‘Study on the Implications of 5G Deployment and Future Business Models’ 2  Ofcom (2017) ‘The Communications Market Report 2017’ 3  LGA (2017) ‘Facilitating the next generation of mobile connectivity’ https://www.local.gov.uk/our-support/ our-improvement-offer/case-studies/facilitating-next-generation-mobile-conn ectivity

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

July 2018 • Delivering change: how cities can make the most of digital connections 4 mobile data capacity.To ensure that this latest wave of investment in digital infrastructure has the greatest positive impact for people and businesses, this report will highlight how cities such as London and York are working to become world class in their utilisation of today’s networks and technology to improve the management, productivity and inclusiveness of their cities. This report sets out practical advice to cities and makes recommendations to the government and businesses on what they can do to improve urban digital connectivity. The report is split into three sections: • Section one looks at the state of physical and digital infrastructure across UK cities.

• Section two looks at how to support investment and rollout of the hardware that will be required – the fibre connections and dense network of cells running into and on top of nearly every building. • Section three looks atwhatcities can do to ensure thatindividuals, businesses and the public sector are able to take up the potential of this hardware.

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

July 2018 • Delivering change: how cities can make the most of digital connections 5 Two strands of digital connectivity infrastructure are most relevant in the UKurban policy context – fixed and mobile networks (as set out below).The UK performs well by international standards for the provision of superfast broadband and 4G mobile coverage, but lags on fibre provision. Cities, national government and infrastructure firms are all making significant efforts to support investment in fibre and the improved 4G and future 5G mobile networks that will rely on it.

Box 1: Fixed digital networks • Copper – Data sent across existing telephone lines from exchanges. Supports broadband. • Fibre to the cabinet (FTTC) – Copper or cable connections into homes from nearby fibre-connected cabinets. Supports what the Government calls superfast broadband (download speeds greater than 24Mbps). Upgrades set to increase speeds significantly. • Fibre to the premises (FTTP) – What government calls full fibre networks that support speeds of 1Gbps.4 4  (p.4) Kenny, R, (2015) Exploring the costs and benefits of FTTH in the UK, Nesta 01.

What does digital connectivity look like across the UK?

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

July 2018 • Delivering change: how cities can make the most of digital connections 6 Status check: Fixed connectivity Today the UK and its cities, in particular, enjoy, by international standards, cheap and effective fixed broadband (greater than 10Mbps) and mobile digital connectivity. It ranks 7th out of 28 countries in the EU5 – behind only Denmark, Sweden, Finland, the Netherlands, Luxembourg and Ireland but above other large countries. Figure 1: Average download speeds (Mbps) Source: Ofcom (2017) Connected Nations 5  European Commission (2018) The Digital Society and Economy Index Newcastle Sunderland Middlesbrough Hull York Leeds Bristol Gloucester Exeter Plymouth Southampton Brighton Worthing Southend Basildon Chatham Crawley London Norwich Ipswich Peterborough Aldershot Reading Swindon Oxford Milton Keynes Northampton Luton Cambridge Stoke Telford Coventry Nottingham Mansfield Derby Sheffield Wakefield Birkenhead Liverpool Burnley Blackpool Blackburn Warrington Barnsley Swansea Cardiff Newport Portsmouth Bournemouth Leicester Slough Preston Wigan Bradford Huddersfield Birmingham Average download speed in Mbps, 2017 26.4 — 38.0 38.1 — 44.9 45.0 — 51.8 51.9 — 59.6 59.7— 67.2 102.9 (York) Belfast Glasgow Edinburgh Aberdeen Dundee Manchester

Delivering change - How cities can make the most of digital connections Simon Jeffrey and Lahari Ramuni July 2018

July 2018 • Delivering change: how cities can make the most of digital connections 7 Superfast broadband (greater than 24Mbps) is now available to over 95 per cent of UK homes,6 supported by the Department for Digital, Culture, Media and Sports (DCMS) through its £1.6bn Broadband Delivery UK investment programme. Within the UK, average download speeds vary across cities (figure 1). More than half (53 per cent)7 of urban addresses can now access fixed connections faster than 100Mbps, with around 4 out of 5 of these also able to access speeds of over 300Mbps.8 These are driven by the spread of fibre to the cabinet (FTTC) found on most city streets before copper or coaxial connections connect into properties.

The UKlags farbehind many othercountries on full fibre to the premises (FTTP), which can deliver download speeds of 1Gbps, with only 3 per cent covered. 9 BT Openreach has promised to reach 10 million homes by the mid-2020s.10 Competitors have also announced plans to rollout FTTP to 10 million homes by 2025. Cities have been the natural focus of these announcements so far,as they offerthese firms large markets of consumers to sell to. Ofcom expects coverage to reach 20 per cent of premises in 2020.11 Box 2: Fixed connectivity for businesses Businesses that need reliable, high-speed internet connections have long been able to lease lines from providers. In London, where there has been a concentration of firms in finance and business services that have required these connections, this has matured into a functioning market that offers the most affordable full fibre access in the country: 98 per cent of firms in Central London are within 100 metres of BT fibre and at least three competitors’ networks.12 6  DCMS (2018) ‘Superfast broadband now available to more than 19 out of 20 UK homes and businesses’ https://www.gov.uk/government/news/superfast-broadband-now-available-to-mor e-than-19-out-of-20- uk-homes-and-businesses 7  Ofcom (2017) Connected Nations 2017 8  Ofcom (2017) Connected Nations 2017 9  Ofcom (2017) Connected Nations 2017 10  ‘Openreach Aim FTTP Broadband for 3 Million Premises in 8 UK Cities’ (2018) ISPreview https://www. ispreview.co.uk/index.php/2018/02/openreach-aim-fttp-broadband-3-million-pr emises-8-uk-cities.htm 11  Ofcom (2018) New Ofcom rules to boost full-fibre broadband https://www.ofcom.org.uk/about-ofcom/ latest/media/media-releases/2018/new-rules-boost-full-fibre 12  Ofcom (2016) Ofcom Business Connectivity Market Review – Volume 1

July 2018 • Delivering change: how cities can make the most of digital connections 8 Status check: Mobile connectivity Compared to its European neighbours, the UK performs below average on 4G download speeds, but does better on coverage.13 Mobile connectivity has improved and expanded rapidly,mostly led by private sectorinvestment. At the end of 2017, 93.6 per cent of premises in urban areas in the UK had 4G coverage outdoors.14 Indoor 4G coverage in urban areas rose to over 64 per cent in 2017 from 45 per cent the year before,15 and there are now over 50 million 4G mobile subscriptions in the UK16 since 4G’s introduction in late 2012.

But the quality of coverage varies across networks and between and within cities, with London having the best and worst speeds depending on the network.17 At peak times – such as at football stadiums during matches or at train stations at rush hour – networks slow or reach capacity. Tall buildings, narrow streets, glass and steel constructions pose problems for coverage, a particular issue that the City of London is tackling in case study 2 below. More masts and cells, more spectrum and smarter data compression can all help to address this issue. As data demands have grown by almost 50 per cent every year,18 networks have increased the number of cells, each requiring permission, power, fibre and somewhere for the units to be attached.

Box 3: Mobile digital networks • 2G – First digital mobile network. Supports text messaging and voice calls • 3G - Video calling and higher data capacity to support mobile internet • 4G – Much higher data speeds to enable far more extensive and convenient video streaming and gaming on mobile devices • 5G – More than 20 times faster than 4G with latency (time it takes to send and receive information) a tenth of that of 4G. Capacity for more internet-connected devices. 13 https://opensignal.com/blog/2018/02/20/europes-4g-speeds-rise-while-the-re st-of-the-world-stalls/ 14  Ofcom (2017) Connected Nations 2017 15 Ofcom (2017) Connected Nations 2017 16 Ofcom (2017) Connected Nations 2017 17 https://opensignal.com/reports/2018/04/uk/state-of-the-mobile-network 18 Ofcom (2017) Connected Nations 2017

July 2018 • Delivering change: how cities can make the most of digital connections 9 What is 5G? 5G networks offer higher speeds and greater capacity. They can improve the user experience of current applications and overcome existing network bottlenecks such as at train stations at rush hour or major sporting events. But 5G also has the potential to be transformative in how digital connectivity can be used. While earlier iterations have improved connectivity between people, 5G supports fargreater connectivity between devices on a scale not possible with existing technology. These devices are able to communicate directly with one another, creating the potential for a far more complex but seamless ‘Internet of Things’. 5G’s greater capacity and lower latency could improve the safety and effective traffic capacity of existing road networks as vehicles could move in unison and at higher speeds. Infrastructure monitoring could be improved by connecting more sensors than is possible today, improving maintenance and reducing stoppages due to inspections or failures. Advanced robotics and 5G could transform manufacturing and healthcare as sensitive tasks requiring real-time responses and feedback, currently only possible for a human to carry out in person, are made possible remotely.

Why is 5G rollout different? The shorter range of the higher frequency radio waves that 5G uses will require many times more cells in cities than the 4G network. Each cell must be connected to its own fibre and power connection. Building and maintaining this network across UK cities would require far greater interactions between network and infrastructure operators, landlords and planning authorities than for previous rollout of new technology.

July 2018 • Delivering change: how cities can make the most of digital connections 10 The main barriers that slow down installation and push up the cost of digital infrastructure investment have been studied in previous reports.19 Taking these findings into account, in addition to interviews with different cities, national government and mobile and fibre network operators, this section highlights what can be done to encourage and enable investment in digital infrastructure, organised across three themes: 1. Improve market conditions – telecoms infrastructure inherently requires a large front-end investment and relatively low operating costs. There are several steps that could be taken to ease this cost or at least mitigate the risk associated with the operation 2. Make access easier – the process of getting the pipes, the masts and the cells in place is time and resource intensive. This section highlights the institutional changes that could ease this relationship for both local authorities and network operators 3. Take the initiative, be a testbed or innovator – for cities that are ahead of the curve in installing the networks, there is a potential opportunity to act as a testbed forupcoming applications or models of deployment or ownership of infrastructure 19 Analysis Mason (2017) Lowering barriers to telecoms infrastructure deployment; DCMS (2016) Emerging findings from the BDUK market test pilots 02.

How can cities speed up the rollout of infrastructure?

July 2018 • Delivering change: how cities can make the most of digital connections 11 Create a more attractive market The Government has expressed its enthusiasm and extended support to the rollout of fibre infrastructure across the UK through the Full Fibre Networks Fund and there is funding yet to be allocated. The private sector has clearly demonstrated an appetite for investment, as shown by the expansion plans of firms such as CityFibre and Hyperoptic. Cities are levering their assets and knowledge to support these and their own ambitions too. York aims to build on its achievements in harnessing and attracting investment to become the UK’s first gigabit city where all business and residents will have access to FTTP.20 There are a number of clear steps cities can take to reduce the associated cost and risk for investors that would hasten this process and get them ahead in the line for world-class infrastructure.

• Simple as it may seem, it is vital that cities have a clear point of contact for firms looking to invest in digital infrastructure. Interviews revealed that even local government leads working to support digital connectivity have found it difficult to find who their appropriate counterpart is in neighbouring authorities. This contact should have senior authority or support from the chief executive or chief digital officer where these are in place. • Cities should know and lever their existing assets. If there are any existing fibre or ducting networks that could be used for fibre, then that should be made clear. Traffic light systems, CCTV networks and fibre ducting belonging to firms that are no longer in operation could all reduce the time and cost of rolling out fibre. This core network can then create a potential market for affordable extension to other premises.

20  https://www.york.gov.uk/info/20151/community_innovation/1778/broadband_in_y ork

July 2018 • Delivering change: how cities can make the most of digital connections 12 Box 4: Knowing and levering existing assets Bristol City Council has levered its ownership of an unused ducting network to underpin its wider Bristol Is Open smart city innovation platform. York has similarly leverd its traffic light network to rollout fibre (see case study 1 below). Ordnance Survey is working with the British Geological Survey and Future Cities Catapult on Project Iceberg to help cities betterunderstand and share knowledge ofunderground assets. This is intended to help speed up planning decisions and the delivery of underground assets such as fibre optic cables. • Work at city scale to reduce the complexity of rolling out networks in cities. Common planning rules or shared digital infrastructure teams lower the costs to infrastructure providers of dealing with cities. This allows networks to expand naturally and efficiently according to proximity and return on investment rather than conform to arbitrary local authority boundaries. Pooling this task should also lower costs for individual authorities. • Reduce risk forinvestment by using procurement effectively and aggregating demand. Public sector bodies have the budgets for long-term digital connectivity contracts and geographic scale across their estate to offer fibre network providers an ‘anchor network’ to invest in. Working with the private sector, cities could coordinate and support attempts to aggregate local demand. The third section of this report talks about how procurement can also be used to increase the adoption of digital technology. • Set out city development plans, showing where new housing, commercial and transport infrastructure will go and when. This gives investors a clearer idea of the business case for investment in a city when planning where to work next.

Take advantage of the convergence of fibre and mobile networks. Mobile network operators need fibre connections to provide the data backhaul to and from masts and cells. These will proliferate with 5G. Fibre providers such as CityFibre lookat mobile operators as major customers in addition to commercial and residential premises. Support for fixed networks will make cities more attractive to investment from mobile operators and vice versa.

July 2018 • Delivering change: how cities can make the most of digital connections 13 Case study 1: York – Innovative procurement and a culture of experimentation York has combined innovation in procurement to deliver digital connectivity with a council-wide ambition to use digital innovations to solve problems, save money and improve services for the public. This ambition and action have led to York receiving investment from the private sectorto rollout FTTP, making it the numberone city in the UK for average internet speeds. York aims to become the first‘Gigabit city’ and is on course for 70 per cent full fibre coverage by 2019. In 2009, York tendered for a new consolidated connectivity platform and service. Rather than simply provide internet for council buildings and key infrastructure platforms such as traffic lights, the city saw the potential in a bid that proposed levering this consolidated demand and large contract to install a fibre optic ring. As well as fulfilling the original specification, it allowed more of the public sector estate – council buildings, libraries, schools, community hubs, traffic management and strategic transport hubs – to connect affordably and easily to a high-speed network to the benefit of workers and consumers.The networkhas also underpinned a free, high-speed wifi network in the city centre.

In order to offer greater scale in procurement and a more attractive tender for bidders, York has a joint Head of ICT, Super Connected Cities & Digital Innovation with Harrogate. To improve city management, York has installed LoRaWan sensors on its roads which record transit data and monitor road temperature. This information will allow the council to only grit the roads that need it in cold weather conditions, saving time and money and improving the service. The city is also in the process of installing moisture and temperature sensors in social housing. The aim is to save money and improve housing quality for residents. Damp or cold readings are flagged for investigation, and maintenance can be carried out before problems become harmful, unpleasant or expensive to rectify.

July 2018 • Delivering change: how cities can make the most of digital connections 14 This will be more time and cost efficient than an officer carrying out inspections in person. While 5G will transform the potential for the ‘Internet of Things’ to help improve public services,Yorkhas shown that applications do not need to be expensive or complicated and can be introduced today if they are the right solution to a problem. This infrastructure investment has been accompanied by simple but effective improvements to digital interactions, such as redesigning the council website to suit handheld devices and the introduction of online applications and payments for council-run services. It is estimated that around 5,000 transactions are carried out online every month, saving the council around £210k in running costs. Making access to sites easier Gaining access to sites within a reasonable time and at a reasonable cost is cited in interviews – by mobile operators, fibre companies and even councils supporting them in their work – as one of the biggest stumbling blocks for rolling out infrastructure.

Better existing arrangements One of these elements is the variety of wayleaves – a right of way from a landowner – that require individual consideration and negotiation before work can begin. Business and network operator frustration in the City of London led to the creation of a simplified wayleave worked on by all stakeholders, with the support of DCMS (see case study 2 below). Cities should: • Promote awareness of the simplified wayleave among landowners, businesses and any network operators in their city. Organisations such as housing associations and other social housing providers should adopt simplified wayleaves. • Ensure simplified wayleaves are uniform across the public realm and public estate within cities to reduce unnecessary complication, cost and delay. Cities could also work with other cities to standardise these arrangements at a larger scale.

July 2018 • Delivering change: how cities can make the most of digital connections 15 Ensure fixed and mobile digital connectivity including ducting is planned into all new developments. The proposed London Plan requires this. Plans should provide adequate cells around tall glass and steel buildings. Integrate readiness for 5G and full fibre when carrying out street works such as renewing street lamps, traffic lights and resurfacing roads or pavements. Over the coming years a ‘dig once’ mindset could avoid disruption and reduce costs to businesses and the public, as cities make supporting digital connectivity another aspect of improving the public realm.

Innovative forms of access Dense fibre and mobile networks connecting every building and potentially lamppost require new ways of working, commercial models and capacity in local authorities to enable or deliver. The costs and novelty of 5G rollout, as well as the urban and city centre focus, means that cities are well placed to trial new and different models of deployment and ownership, as has been seen with fibre networks. Cities have access to a unique range of sites, including public buildings, land and assets such as bus stops and traffic lights. Local authorities have already developed new methods of deployment to take advantage of this.

As part of bidding for the £100 million 5G Urban Connected Communities Fund,21 some cities have considered how they might lever their particular assets, future public procurement and the potential demand for fibre and 5G. This can speed up investment in better digital connectivity for residents and public sector users, while at the same time create a revenue stream through a publicly owned local fixed and mobile digital infrastructure. Anotherdeployment method already in use is the private concession model to deploy small cells on street furniture. Concessions have been agreed in 14 London boroughs, Aberdeen and in the City of London, as discussed in case study 2. Cities lever the value of their assets in return for free public wifi and create a revenue stream. This model means that cities deal with one organisation rather than many, which could reduce the burden on resources and speed up the rollout of better connectivity. 21 https://www.gov.uk/government/publications/5g-urban-connected-communities- project

July 2018 • Delivering change: how cities can make the most of digital connections 16 Case study 2: City of London – keeping up with the global standards in connectivity The City of London is a key part of London’s standing as a global financial centre. As such, the City of London Corporation views it as imperative for the Square Mile to maintain its edge across various domains – skills, regulation, and infrastructure, including digital connectivity. The City of London Corporation has placed an emphasis on staying up to date on the connectivity technology available right now and preparing forthe advances yet to come.To this end, the infrastructure and the legal framework are being upgraded and adapted to improve not just the provision of a network but also access to it. On the fixed network side, the City of London’s key achievement has been the creation of a standardised wayleaves document.22 Acquiring a wayleave from a building owner is consistently cited as a significant stumbling block for telecoms operators across the country. The corporation partnered with a range of stakeholders to publish the standardised wayleave and an accompanying toolkit. The document has been downloaded around 2,000 times so far, is championed by the Greater London Authority (GLA) for use by other London boroughs and Greater Manchester is also introducing a standardised wayleave.23 For mobile connectivity, the City of London adopted a concessions model to enable investment in the network. In 2017 it created a 15- yearcontract giving access rights to install and operate small cells on street furniture and macro cells on roof spaces of corporate assets under open access obligation for other providers. In return, the concessionaire will invest to upgrade 4G and WiFi and start delivering the 5G network in the Square Mile. The free WiFi network has been accessed by 100,000 registered users so far, and the 22  City of London digital infrastructure toolkit: Standardised wayleave 23 https://www.greatermanchester-ca.gov.uk/.../item_4_-_gm_digital_infrastruc ture_plan

July 2018 • Delivering change: how cities can make the most of digital connections 17 intensification of the 4G network has started with the installation of 400 new microcells, which will help prepare the City for 5G. CTIL, which is Telefónica and Vodafone’s infrastructure joint venture, is the City of London’s partner on the project. It has funded someone to sit within the Corporation fortwo years to coordinate the increased work with the highways division that this programme will create. The Corporation expects this concession to be revenue-positive. Act as a testbed The Government recognises that there will be no single answer to the effective rollout of better mobile and 5G digital connectivity in cities and that partnership between operators, cities and business will be important. The £200 million 5G Testbeds and Trials Programme, one element of the National Productivity Infrastructure Fund, has so far seen six areas trial a variety of new use cases of 5G. Around £100 million of this fund will soon go to one large city in the 5G Urban Connected Communities24 project to test new use cases and infrastructure deployment models. The Government is set to announce the winning bid Summer 2018 and to have work underway by early 2019.

Some cities see a cleareconomic opportunity in getting digital infrastructure in place now when clear commercial uses are still years away. 5G products will need to be developed and tested somewhere with this infrastructure in place, and many applications – connected autonomous vehicles and a far more advanced Internet of Things – are likely to be targeted towards making cities work better. Acting as a testbed is viewed as a way to attract investment and put the cities involved at the front of the line when the applications do come.

This has been the case forMilton Keynes (see case study 3) which is trialling autonomous vehicles on its streets today. Helped by funding from the 5G Testbeds and Trials Programme, Bristol and Bath are looking at how 5G could impact on tourism, creating more immersive experiences for visitors, while in Tyne and Wear applications are looking at energy, transport and health. Only one city will win the 5G Urban Connected Communities competition, but all bidding cities should look to pursue any viable business models for use cases and deployment.

24  DCMS (2018) 5G Testbeds and Trials Programme - Urban Connected Communities Project: Overview

July 2018 • Delivering change: how cities can make the most of digital connections 18 Case study 3: Milton Keynes - using digital connectivity to enable new transport solutions Milton Keynes has made the decision that it wants to be at the forefront of technology, to advance its image as a modern city. Leading in 5G is part of this ambition. The New Town has grown rapidly into a city since its creation. Its heritage has endowed the city with a car-based transport system. But as the population grows and the number of jobs in the city centre expands, the city’s excellent road network and parking facilities cannot expand. This has created pockets of congestion and delay. The city cannot quickly or easily change its layout and dispersed housing pattern, and this makes conventional public transport solutions to congestion such as buses or rail unsustainable in some areas, with too few potential riders to fund these services. This seemingly intractable problem of supporting economic and population growth while also addressing congestion in a city where conventional public transport is unsuited has opened up an opportunity for trialling innovative solutions. The city hopes that autonomous buses or pods would eliminate the cost of drivers (although create other costs) and this, combined with demand-led services ordered from a smartphone, could make services to collect people from less densely populated areas viable. The city has attracted in firms that are trialling autonomous vehicles today. This fits into a broader range of actions through which the city hopes to demonstrate this ambition, such as a city-wide electric car charging network. The city has plans for a new university to work with businesses to develop technology, levering its existing economic strength in this area.

July 2018 • Delivering change: how cities can make the most of digital connections 19 What is the Government doing? The Government is working to create a ‘world class’physical digital network in a numberof ways, set out in its 5G Strategy forthe UK. A numberof these policies seem to be, or are likely to be, working on their own terms: • The Government’s Housing White Paper25 sets outa requirement forlocal authorities to include the provision of digital infrastructure in planning policy, as does the proposed National Planning Policy Framework (MPPF).26 This will be a positive step to support local plans if it makes it into legislation. • Broadband Delivery UK’s (BDUK) £1.6 billion superfast broadband investment programme is being followed up by a £200 million Full Fibre Local Networks challenge fund for cities to bid for. Thirteen areas won £95 million in the first round in March.27 The winning schemes offer a variety of different models for how to support the rollout of fibre across different cities. For example, laying fibre along the Blackpool Tramway, connecting to a transatlantic cable underwater off the coast of Cardiff, or creating long-term contracts for fibre in public buildings in Wolverhampton.28 • The Telecommunications Infrastructure Act 2018 was passed to support the rollout of full fibre and 5G. It sees communications providers exempted from business rates for five years on new fibre installation.

Others have been less successful so far on their own terms. The Digital Economy Act 2017 introduced reforms to the Electronic Communications Code (ECC), previously updated in 1984. On the announcement, DCMS declared the aims of the new Code as to: • Bring down the rents telecoms operators pay to landowners to install equipment to be more in line with utilities providers, such as gas and water • Make it easier for operators to upgrade and share their equipment with other operators to help increase coverage 25  MHCLG (2017) ‘Fixing our broken housing market’ 26  p.31 Draft revised National Planning Policy Framework p.31 Draft revised National Planning Policy Framework 27  MHCLG (2018) ‘£95 million for local full-fibre broadband projects’ https://www.gov.uk/government/ news/95-million-for-local-full-fibre-broadband-projects 28  ISPReview (March 14, 2018) ‘Brief Summary of the 13 New UK Full Fibre Local Network Projects’ https:// www.ispreview.co.uk/index.php/2018/03/brief-summary-13-new-uk-full-fibre-lo cal-network-projects.html

July 2018 • Delivering change: how cities can make the most of digital connections 20 • Make it easier for telecoms operators and landowners to resolve legal disputes.29 The then DCMS Secretary of State, Matt Hancock MP, had stated that the code will ‘ help promote investment in new technologies such as 5G, and give mobile operators more freedom to improve their networks in hard-to- reach places’30 The new code replaces freely contracted marketrents formastand cell sites based on the value to network operators with a much lower compensation level based on the value to the landowner. The Government’s impact assessment of the ECC had expected it to reduce rents to landowners by around 40 per cent, or £709 million over 20 years, and lower business rates by up to £307 million over the same period.31 The greatest absolute cuts will be in cities where the rent values for mobile mast sites are highest as they can serve the largest number of customers. The British Property Federation highlights the case of a site in the City of London with a current rent of £32,000 per annum that was quoted compensation of £80 per annum for renewal.32 Landowners also have less flexibility under the new code, required to give operators 18 months’ notice to remove network infrastructure, a significant limitation that can delay new commercial or residential developments that could have wider economic or social benefits. It is unsurprising that among British Property Federation recommendations to the Government to improve the code and supportthe improvementof digital infrastructure,one is that private landlords should only be approached ‘as a last resort’ if no alternative sites under public ownership can be found.33 At present, many property owners, rural and urban, are choosing not to engage with operators to develop new infrastructure until legally compelled to do so. The code’s full implementation will await the first legal cases between operators and property owners to be decided. This may not be until 2020 when full commercial 5G networks are expected to be up and running in cities around the world, and mobile data usage in UKcities will have doubled. In the short term, it seems that the provisions of the code have unintentionally led to a temporary pause in much new development and a permanent reluctance to host new mobile infrastructure among landowners. 29  ‘Reforms to boost UK’s digital infrastructure’ (2017) https://www.gov.uk/government/news/reforms-to- boost-uks-digital-infrastructure 30 https://www.gov.uk/government/publications/5g-urban-connected-communities- project 31 https://assets.publishing.service.gov.uk/government/uploads/system/uploads /attachment_data/ file/524895/ECC_Impact_Assessment.pdf 32  Interview with British Property Federation 33  DCMS (2018) 5G Testbeds and Trials Programme - Urban Connected Communities Project: Overview

July 2018 • Delivering change: how cities can make the most of digital connections 21 The Government has launched the Future Telecoms Infrastructure Review to lookinto these and otherissues affecting rollout, while a Barrier Busting Task Force is working with stakeholders to overcome any areas of conflict that might slow down rollout, including problems of co-ordination or implementation of other government policy. The High Court in February ruled that the installation of mobile antennae on poles on top of buildings could not be carried out under permitted development.34 New, altered or replacement masts allowed under that order, such as wall mounted antennae, will also now need planning permission. This is likely to limit the rollout of improved 4G in cities, and the Government should make it easier for landowners and networks to improve digital infrastructure where there is agreement.

The Governmentwill need to continue to workwith cities to achieve its aims. But there is more it could do to support investment in digital infrastructure in cities: • Require provision for high quality fixed and mobile digital connectivity in the final NPPF to give greater clarity and certainty to local plans as they are brought forward • Review the Electronic Communication Code in December if it remains a barrier to improved digital connectivity in the short term in cities. 34 http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Admin/2018/263 .html

July 2018 • Delivering change: how cities can make the most of digital connections 22 Other organisations Major housing developers and network operators are working together to deliver fibre and superfast internet into new developments.35 But this is optional and, in developments of 30 or more homes, requires nine months’ notice before its first use36 for free installation of full fibre. On smaller sites developers may only get FTTC and have to pay forthe installation. In London over 50 per cent of homes in new postcodes had access to full fibre, but nationally up to 25 per cent of new builds are not even connected to FTTC. Full fibre and provision for high-quality mobile connectivity should be required by the Government in the NPPF and local plans in cities. This will ensure that the Government’s investment through BDUK to connect existing properties to fibre will not be required for new developments. 35 https://www.ournetwork.openreach.co.uk/property-developers/site-registrati on.aspx 36  Or nine months before lifts are commissioned in multi-storey buildings

July 2018 • Delivering change: how cities can make the most of digital connections 23 As set out in the section above, cities can work to remove or reduce unnecessary barriers to new investment and create more attractive opportunities to build a ‘world class’ digital infrastructure. But the value of this new ‘hardware’ - and that of the existing digital networks - depends significantly on the ‘software’ available to it: namely the skills and capacity that enable individuals, firms, and cities to understand how to use the hardware to improve their lives, business or city services. The differing availability of this software across UK cities helps drive digital divides. Take-up of superfast broadband varies across UK cities. The Government’s investment helped raise the availability of superfast broadband in UK cities to 94 per cent by May 2017. While take-up is growing, levels are still low in some cities: 36 per cent on Merseyside and Greater Manchester and 39 per cent in Newcastle by the end of 2017.37 Across UK cities, take-up of this improved connectivity by households was 43 per cent, a take-up gap of 51 per cent. This highlights how the availability of connectivity or technology is necessary but not sufficient for its take-up.

The take-up gap ranges from over 60 percent in Aberdeen to less than 40 per cent in Crawley. Take up will grow as older contracts expire and new speeds are available. 37  Broadband Delivery UK (BDUK) 2018 : Table of local broadband projects: https://docs.google.com/ spreadsheets/d/1Hs00bNsyRV1WoOt-fow3rsNXzpcKg26AsOWvk1bvJRk/edit#gid=0 03. What can cities do to improve take-up?

July 2018 • Delivering change: how cities can make the most of digital connections 24 Figure 2: Gap between availability of superfast broadband and take-up (percentage points) Ofcom (2017) Connected Nations While there is a clear link between higher download speeds and greater data consumption up to 40Mbps, consumers with faster connections do not seem to have higher data usage.38 This indicates that many of those who subscribe to new super-fast broadband connections are not changing the way they use the Internet.

38 Ofcom (2017) Connected Nations Data Analysis 4. Fixed broadband networks and services Newcastle Sunderland Middlesbrough York Leeds Bristol Gloucester Exeter Plymouth Southampton Brighton Worthing Southend Basildon Chatham Crawley London Norwich Ipswich Peterborough Aldershot Reading Swindon Oxford Milton Keynes Northampton Luton Cambridge Stoke Telford Coventry Nottingham Mansfield Derby Sheffield Wakefield Birkenhead Liverpool Burnley Blackpool Blackburn Warrington Barnsley Swansea Cardiff Newport Portsmouth Bournemouth Leicester Slough Preston Wigan Bradford Huddersfield Birmingham Take-up gap, 2017 (pp) 38.5 — 46.2 46.3 — 50.6 50.7 — 54.1 54.2— 56.6 56.6 — 60.2 Belfast Glasgow Edinburgh Aberdeen Dundee Manchester

July 2018 • Delivering change: how cities can make the most of digital connections 25 This section looks in two parts at what action cities can take to improve the take-up of digital technology and innovation: • Tackle the digital skills issue so that individuals and firms in cities can take advantage of new technology to increase productivity, wages and employment. In addition, this will ensure that new technology does not exacerbate existing digital exclusion. • Take the lead on digital innovation and upskilling by sharing and adopting best practice on the use of new technology to improve public services, procurement and open up data to take advantage of external expertise and ideas.

Tackle the digital skills issue Operating at the same level as the local labour markets, cities have an important role to play in encouraging and facilitating the adoption of digital tools by local citizens, businesses and within their own organisations by: 1. Help to coordinate and support existing digital skills programmes. The many national programmes and numerous private and public sector interventions aimed at improving skills more generally, and digital skills in particular, make understanding what is needed and available difficult, even for those working in this area. Cities have a role to play in improving information for people and firms looking to develop new digital skills or increase their earnings and understand what is available, and for providers to ensure that they are providing those skills. 2. Tackle digital exclusion. Historically, the benefits have been less extensive, and the downsides more pronounced for those without the skills to adapt to technological change. Improved digital connectivity has made activities such as paying council tax or finding out information about city services more convenient for those residents with digital skills and less costly for cities. Cities have a role to play in supporting those individuals who are digitally excluded.

July 2018 • Delivering change: how cities can make the most of digital connections 26 Improve digital skills provision and co-ordination in cities Greater digital connectivity, its role in displacing and creating jobs, and the rapid evolution of what constitutes digital skills have raised the importance of developing a more effective education and skills system that supports an ongoing process of life-long learning. Cities have an important role to play in the functioning of an effective skills system for those demanding and providing courses or training.

Failure to develop a skills system, including digital skills, that responds to changing labour market conditions39 will likely deepen economic, social and spatial divides that have grown over recent decades. Devolution and flexibility The Government recognised the importance of cities in skills when devolution deals for metro mayors included control of the Adult Education Budget. But these powers have yet to be devolved by the Department for Education. Mayors Andy Burnham in Greater Manchester and Andy Street in the West Midlands have made becoming digital hubs central to their ambitions for their city-region economies. But they are as yet unable to fully integrate improving adult skills into this vision, ensuring the workforce has the digital skills to attract technology firms, and adapt to the changing economy. The Government should devolve the adult education budget and flexibility over how it is used, as promised. Information and awareness Cities can further support digital skills by helping to make sense of the variety and complexity of provision and demand for these skills across the city. These informational problems for firms, workers and providers are bad for local economies.

From an individual’s and business’s point of view, it is difficult to get a clear picture of the digital skills courses that are on offer locally within a city or accessible online. Thousands of options ranging from three-year university degrees to online webinars and two-day courses make it hard to know what is most appropriate. A lack of knowledge of the skills that certain jobs require, or the wages they offer, affect individuals’ choices. 39  Nesta is working with DCMS on how this system might work and is involved in the Digital Skills Partnership

July 2018 • Delivering change: how cities can make the most of digital connections 27 Providers also suffer from problems of information on the existing and forecast digital skills gaps in a local economy and the rewards for filling them.This information would allow them to devise and provide courses that will best help individuals to develop and retrain and businesses to grow and respond to the economic impacts of greater digital connectivity. The importance of this task and the economic and financial costs to business and the national economy has seen multiple attempts at action and co-ordination by private and public actors to improve the situation over recent years, and research into effective digital skills provision from around the world.40 Business has been involved in various ways with Chambers of Commerce, Local Enterprise Partnerships (LEPs) and new organisations such as Be the Business all looking at how to improve digital skills and productivity.

Cities should use their local knowledge and position as leaders of places to help overcome these informational problems. Applications to support this that use open data and user-friendly digital design and accessibility are being developed, and progress and experience should be shared. In Doncaster, funded by Innovate through the Open Data Institute, the city is working with Uscreates to bring the huge range of education and training data together into one place, presented in a way that aims to help young people make more informed career decisions.41 Co-ordination and collaboration To supportlocal co-ordination,the Governmentis also helping the formation of Local Digital Skills Partnerships (LDSPs) across the country, made up of public, private and third sector organisations to better understand existing provision, gaps and set shared priorities. LEPs (which should match functional economic areas) are the main local policy partner, and pilot LDSPs have been launched in Lancashire and Heart of the South West LEPs.

40  Orlik, J. (2018) Delivering Digital Skills, Nesta 41 http://www.ukauthority.com/data4good/entry/8264/odi-calls-for-more-council s-to-address-open-data

July 2018 • Delivering change: how cities can make the most of digital connections 28 Box 5: The Digital Playbook A ‘Digital Playbook’ for LDSPs is under development, led by the Good Things Foundation, a digital inclusion charity, and TechNation, a network for technology entrepreneurs. This playbook sets out what local areas should think about when setting up a partnership. Rather than working in a limited group before publishing a finished document, the playbook allows local practitioners to engage and co-create the document, taking advantage of dispersed local knowledge and experience. Hosted as an open Google Docs sheet, contributors from across the country add to the living document to highlight best practice and debate successful strategies, taking advantage of digital connectivity. While not complete, the playbook already offers links to new tools under development that will help cities to get started on a Local DSP. These include using DWP data to better understand skills demand to inform digital skills strategies. It also includes sections on different funding sources available and sets out the sorts of organisations that should be part of partnerships. The aim of LDSPs is to reduce duplication in local activities, increase information and awareness among organisations working to improve digital skills locally and spread best practice in what works and how to attract in resources from organisations such as Google Digital Garage, TSB and Lloyds banks.

If they are to be effective, cities and business should engage fully with LDSPs, and ensure that digital skills programmes are evaluated and focus on those that have a clear positive impact for individuals, such as the Per Scholas programme below.

July 2018 • Delivering change: how cities can make the most of digital connections 29 Case study 4: Per Scholas The shortage of digital skills and the productivity of workers who develop these skills is demonstrated by the remarkable results of the Per Scholas programme in the US. The programme provided training and employment support for low- income individuals in the Bronx. Its five core features were: • Intensive screening of applicants for motivation, capability and need • pre-employment and career readiness services • occupational skills training that meets the needs of local employers (15 weeks at Per Scholas) • job development and placement services based on strong relationships with employers • post-employment retention and advancement services. Three years on from the programme, Per Scholas has been found to have ‘large and growing’ impacts on employment and earnings, with participant earnings $4,800 or 27 per cent higher on average than the control group. This is an increase on the two previous years, with no effect on earnings in year one, and $3,700 in year two. Both effects were statistically significant and on the back of a large-scale, rigorous randomised control trial.

Cities and businesses working together through Digital Skills Partnerships should look to understand how these two US programmes have had such success and how similar schemes might work in UK cities.

July 2018 • Delivering change: how cities can make the most of digital connections 30 Tackle digital exclusion While for many the Internet is the first port of call if they have any query or to pay bills, still only 50 per cent of adults have completed government processes or looked for information on public services online, and 60 per cent have never paid council tax or for another local service online.42 The reason given by those who have not is that they are unaware (32 per cent) or unwilling (56 per cent) to do this online, preferring over the phone or physical methods. 8.6 million people (16 per cent of the population) are not able to fill out an online application form.43 Creating an easy to use and well-designed digital option for people to book pest control or pay for a parking permit is not just more convenient for residents but saves money for the council. At a time of austerity, as demonstrated in case study 5, raising the awareness, motivation and capacity of residents to use these services is important beyond simply social inclusion.

Case study 5: Digital You - How Salford is tackling digital exclusion DigitalYou is a key elementofSalford’s plan to tackle digital exclusion, aiming to engage those residents not going online.The local authority is working in partnership with the Good Things Foundation, a digital inclusion charity with experience and resources in addressing digital exclusion. Digital You operates in existing community settings to engage 8,000 digitally excluded people, aiming to build motivation to go online by using web-based training to show how to access different services that will make a tangible difference to their lives.

The programme also engages support from and coordinates the activities of a broad range of groups carrying out related schemes – 42  Ofcom (2018) Adults’ Media Use and Attitudes Report 43 https://www.lloydsbank.com/banking-with-us/whats-happening/consumer-digita l-index/key-findings. asp#digitalskills

July 2018 • Delivering change: how cities can make the most of digital connections 31 from housing associations to Google, Talk Talk, Lloyds and Barclays – to increase the impact of each, avoid duplication and build a movement that is hoped to endure beyond its two-year funded course. The Mayor of Salford launched the #DigitalSalford programme to take advantage of the growth in digital jobs at MediaCityUK, in order to transform the culture of the local authority and embrace the potential of digital connectivity from top to bottom. Alongside the aim to become ‘the most attractive city to digital companies’, Salford set a vision and took action to also reform how the council operates at every level and raise public awareness of what is possible through its ‘digital first customer strategy’. This translates into pushing departments to take advantage of best practice and make digital the easiest option to interact with the council.44 Pest control can now be booked online, as can taxi licensing. These programmes have been designed with users to ensure they work well, that forms make sense and information is available at every stage. Staff have been trained to use technology, and Grounds Maintenance and Streetscene workers are now able to easily record and receive work requests through iPads while on the road. This is all aimed at improving services and reducing costs at a time when urban local authority budgets continue to fall. 44  https://www.salford.gov.uk/digital-salford/results-so-far/

July 2018 • Delivering change: how cities can make the most of digital connections 32 Take the lead on innovation and upskilling Connected digital devices, combined with a workforce and public confident in their skills to use them can substantially transform service delivery to improve quality, convenience and reduce costs. Cities that do so will at the same time demonstrate widely the benefits of greater take-up of technology to residents, and send out a clear signal of ambition. To take a lead on making the most out of digital connectivity, cities should: 1. Adopt and encourage a culture of innovation, focusing on solving existing problems and addressing local priorities through a digital lens. This requires buy-in across all levels of the organisational hierarchy and a revision of procurement practices 2. Demonstrate digital ambition with concrete actions that embrace innovation 3. Open up data, to improve information-sharing across public servicesandallowinsightsfromoutsideparties.Dueconsideration must be given to privacy concerns and data security. Champion innovation As this report makes clear, many cities are innovating in the use of digital tools to improve public services. But a significant change in how services are delivered carries riskboth with the public and from within organisations. Strong leadership is required to prepare forinnovation in advance of trialling new programmes and while they are underway.

US cities have shown different models for supporting public innovation. In the US innovation teams are becoming common. Philadelphia bases its innovation team outside the Mayor’s office45 to enjoy greater autonomy, while in Boston the innovation team works directly with city leadership as the Mayor’s Office for New Urban Mechanics. Improve procurement systems to support take-up of digital innovation Better public procurement could help spread innovation in cities faster and further as well as potentially reduce costs. The LGA has highlighted the benefits of greater partnership working in procurement to make the most out of limited procurement resources.46 45  p13. Makin, C (2017) Adapting for the future: promoting innovation in city government, WCMT https:// www.wcmt.org.uk/sites/default/files/report-documents/Makin%20C%20Report%202 017%20Final.pdf 46  LGA (2018) National Procurement Strategy 2018: Delivering the ambition

July 2018 • Delivering change: how cities can make the most of digital connections 33 The Local Digital Declaration, published in July and backed by £7.5 million from the Government,sets outhow local authorities and government can work collaboratively – including through procurement - to support digital innovation to improve local public services.47 For business, local government working at city-region scale would create contracts and financial returns large enough to encourage those that would not normally engage with the public sector to put in the effort to innovate new services. Many UK cities share similar challenges. Collaboration on procurement across the Northern Powerhouse, for instance, could open up new digital solutions to issues such as air pollution, and create one-stop-shop apps for smartphones to help residents and businesses easily pay taxes or access services. Internal procurement expertise could be maintained at the city-region level offering support to local authorities to reduce costs, improve quality and open up opportunities through procurement.

From the business side, firms are trying to bridge the gap between fragmented local government procurement and the difficulty smaller digital firms and start-ups face in trying to speak to local government. Examples include new businesses working in UrbanTech and GovTech, such as PUBLIC and Nitrous, which take stakes in firms and create connections with local government. Larger firms such as O2 incubate start-ups to help them use digital connectivity to improve public and private productivity and access clients.

Businesses have complained about the numberof procurement frameworks and the number of council tenders. These businesses are unable to commit the resources to find let alone bid for all the local government contracts that may be available to them, reducing the options for cities. The Government recognises this problem and in 2012 launched G-Cloud to make public sector procurement of cloud-related services quicker and more efficient. It offers more suppliers, clearer costs upfront for the public sector, greater interaction with vendors and no need for OJEU. Businesses in interviews gave a generally positive view of the G-Cloud Framework. The Government should work to extend this format to reduce the number of frameworks and make it easier for more firms to tender for work with cities. This will allow cities to take up innovations made possible through better digital connectivity. 47  MHCLG (2018) The Local Digital Declaration

July 2018 • Delivering change: how cities can make the most of digital connections 34 Demonstrate ambition The effective rollout of physical digital infrastructure requires the coordination and support of many arms of local government, such as highways, planning and economic development teams. Ensuring each team understands what is required of them and how digital will benefit both them and the public, is vital to demonstrate that digital ambition of city leaders can be delivered at all levels. York and Milton Keynes view this as vital to their ongoing investment programme.

Cities should have clear internal communication in place to show how the greater use of digital connectivity can benefit residents and their organisation. Promises made by cities to businesses or network operators will rely on the local authority’s ability to deliver. This requires buy-in at all levels. Cities should find out how other places are using digital connectivity to improve how they manage their city and provide services. Cities should use this knowledge to take concrete steps towards demonstrating their ambition. This could be by opening up data, transforming a service or website or opening meaningful dialogue about collaboration with other authorities or businesses.

Formany cities ordepartments,making this ambition a reality will demand a considerable culture change and technological adaptation.To drive through this change and support workers to adapt to and embrace it, many leaders are now appointing Chief Digital Officers (CDOs) to create advocates for digital connectivity. CDOs have so far been tasked with driving the spread of digital innovation, attracting digital investment, reducing digital exclusion and improving infrastructure. However, their effectiveness will rely on the support shown from leadership once in position. Strategies setting out how cities plan to embrace digital government can be useful, but delivering greater take-up of digital innovation should be viewed as the priority now that digital connectivity is so advanced. As well as affecting how soon a city gets investment in fibre and 5G, any local digital connectivity plan or strategy should ensure that cities, residents and businesses can avoid unnecessary costs and disruption to city life that digging up roads and pavements can bring. Cities are already showing how digital connectivity can improve the performance of urban transport, or help residents make better decisions around social housing. These innovative uses of data supported by digital connectivity are often collected under the ‘smart cities’ heading.

July 2018 • Delivering change: how cities can make the most of digital connections 35 Case study 6: West Midlands - developing a digital strategy West Midlands Metro Mayor Andy Street has made increasing availability and take-up of digital connectivity a central theme of his mayoralty. He worked with the Combined Authority Digital Board, which brings together public and private sector representatives, to develop a digital strategy that will improve skills and infrastructure. The aim of the strategy is to make the West Midlands a globally recognised hub for digital. The strategy is working to coordinate disparate strands, each aiming to improve digital skills, infrastructure and embed the greater use of digital technology within business and local government.

A Chief Digital Officer is set to be appointed soon. Their primary task will be to deliver on these issues and encourage innovation and collaboration by pushing the agenda on GovTech innovation, a data sharing framework across public bodies, regional shared digital procurement, a labour-market-focused data analytics all contributing towards realising regional government as a platform. The Mayor, in partnership with PUBLIC set up the Urban Challenge Award to procure technology-based solutions to one of fourkey urban challenges.These were wellbeing, housing, youth unemployment and digital citizenship. The joint-winners of the challenge, Novoville and Apptivism, focused on the issue of digital citizenship and delivered a citizen engagement platform allowing residents to engage with the council through a chatbot via Facebook messenger. Open up data Opening up and taking advantage of data is a central element of a number of cities’ digital strategies. The case study below shows how Transport for London (TfL) is opening up its data to improve the experience of customers in London and support its economy. Other cities across the country are already taking advantage of the wealth of data that has previously been out of bounds or stored in unwieldy formats, to deliver

July 2018 • Delivering change: how cities can make the most of digital connections 36 greater productivity and financial, social, economic and environmental impacts. Digital connectivity allows this data to be accessed by many more people and organisations, both within city government and without to try and identify problems, solutions or new services to benefit residents. At the city level in the UK, Leeds48 has been at the forefront of opening up its data through Data Mill North and working with ODI Leeds to understand how it could be used to improve public information and services. One experimental use of administrative data gave residents a clear idea of how long it would take to be rehoused depending on the type of house and location they are requesting. This sort of information can inform decisions and put power in the hands of citizens UK cities should work together to produce data in common formats with common rules on access and sharing, building on the national government’s Open Standards principles.49 This would make it as simple and scalable as possible for outside organisations and firms to analyse data from different cities. The Smart London Plan creates an Office for Data Analytics to support data sharing.50 Cities should be aware of the challenges of opening up data. Not all data can or should be public,such as medical orcriminal records under certain circumstances. But using digital connectivity to open up data to users across the public sector can improve the quality of services for the public and support the work of public servants.

GreaterManchesterset up a data warehouse51 that brings togetherdifferent data sources to give social workers more and better information about the people they are working with,improving the speed and quality ofassessment and becoming less reliant on individual knowledge of a case.This has saved social workers three-to-fourhours in completing an assessment, which over a year adds up to nearly two weeks’ work time. Security of data and privacy have become increasingly important issues for citizens over recent years. Cities should be open and clear about what data is stored, for what reason and how it will be used or shared. 48  Data Mill North https://datamillnorth.org/ 49 https://www.gov.uk/government/publications/open-standards-principles/open- standards-principles 50  Smarter London Together https://www.london.gov.uk/what-we-do/business-and-economy/supporting- londons-sectors/smart-london/smarter-london-together 51  Symons,T (2016) ‘Wise Council: Insights from the cutting edge of data-driven local government’ Nesta, LGA

July 2018 • Delivering change: how cities can make the most of digital connections 37 Case study 7: Transport for London (TfL) – how digital innovation is providing a better transport service TfL has the budget, scale and, thanks to digital connectivity, the real- time data to innovate in how it helps move people around London efficiently, affordably and cleanly. The growth in smartphone usage among consumers has supported innovation in how customers are informed and can interact with the network. Falling budgets and revenues add to the drive to use data and innovation to squeeze more out of the existing network.

The most obvious innovation for travellers is the move from paper tickets,toOyster,tocontactlesspayment.Ithasmadetravellingeasier for customers no longer having to buy tickets or top up accounts. It has reduced revenue collection costs by 50 per cent. Its popularity is such that 50 per cent of PAYG journeys are by contactless credit or debit card, or mobile phone. Much of this innovation is shared and picked up by other cities who would otherwise not be able to trial these innovations. The contactless system has been sold internationally to cities such as New York and Boston.

Digital connectivity can change journey choices, supporting the network and public health. The location of every bus is measured in real time so people know how long their wait will be or when to leave the house or office. Depending on that time some may choose to walk instead of wait. Much of this information now comes from apps using data opened up by TfL. This has allowed TfL to take take advantage of external expertise and innovation to improve customer experience — 42 per cent of London travellers now use an app to get information on journeys. Citymapper, which took advantage of the open data, has spread its operation to other cities around the world. The time travellers save by using these apps is worth £130 million to the economy, according to Deloitte.

July 2018 • Delivering change: how cities can make the most of digital connections 38 Conclusion All cities and individuals have benefitted in many ways from better digital connectivity and technology over recent decades, from keeping in touch with loved ones to high wage jobs in sectors that hardly existed 20 years ago. But these benefits have been less extensive, and the downsides more pronounced for cities, firms and individuals without the skills to adapt to and take up the opportunities that better technology and faster fixed and mobile internet have brought.

With the rollout of new and more extensive networks of full fibre and 4G and soon 5G networks, city leaders, national government and businesses must work together to ensure that this investment in the ‘hardware’ of new fixed and mobile digital connectivity in cities can happen as rapidly and effectively as possible. New ways of working at the city level and deployment methods that take advantage of the extensive public estate and realm across cities should be explored to provide better public and commercial services, opportunities for research and development and potential revenues for cities. And government policy to improve the rollout of this infrastructure should be reviewed if it is not achieving its intended outcome.

This new and improved ‘hardware’ must be matched at the local and national level by far better ‘software’ that gives individuals, businesses and cities the skills and confidence to take up the potential of better digital connectivity.This will require greatercollaboration atthe city level to support a cohesive, efficient and responsive skills system, as well as leadership by cities in embracing digital innovation. Failure to do so will likely see the greatest rewards of better digital infrastructure once again accrue to those places and people that have already benefitted from previous advances in technology, thus widening existing digital divides.

July 2018 • Delivering change: how cities can make the most of digital connections 39 Policy recommendations National government should: • Include a requirement for the provision of high quality digital infrastructure – mobile and fixed - in all new developments in the forthcoming NPPF • Review the Electronic Communications Code after 12 months and take action if it remains a barrier to new investment in digital infrastructure • Devolve the Adult Education Budget to metro mayors as promised. Cities should: • Integrate plans for full fibre and 5G connectivity into any future public realm developments, considering how lampposts might be used • Work together to share problems to improve procurement to reduce the costs and increase the diffusion of digital innovation across the public sector and from the private sector • Work with business and take a leading role in Local Digital Skills Partnerships.

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